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Energy prices in Ontario: the ‘epitome of bad planning’

Energy Minister Chiarelli in Windsor: answering those screaming the loudest. [Photo: Blackburn News]Energy Minister Chiarelli tells us he is in control

Listening to CBC Windsor‘s recent radio interview with Energy Minister Bob Chiarelli and reading his recent remarks to the Oakville Chamber of Commerce and Professional Engineers of Ontario, Oakville Chapter, demonstrates the misguided logic and math skills that have made Ontario’s electricity system the mess it’s currently in.

The interview on the CBC was only 10 minutes but the hyperbole was beyond comprehension. In Windsor, Minister Chiarelli was touting “subsidies” for the greenhouse sector. A small part of Chiarelli’s preparedspeech delivered at the University of Windsor was captured on CBC TV and a couple of the greenhouse beneficiaries noted the significance of the subsidies which in one case represents an annual $1 million reduction in their cost of electricity. That will wind up in the “electricity” line on the bills of residential and small business ratepayers. With 1,114 greenhouse nursery and floriculture producers in the province, we “ordinary” ratepayers should hope it’s not $1 million each, or we are looking at a total subsidy of $1.1 billion in annual costs.

The questions raised by the CBC interviewer related mainly to the planned privatization of Hydro One, as did Minister Chiarelli’s Oakville presentation, but the dance moves performed by the Energy Minister at both events and during the interview were over the top!

Here is one part of the report on his speech to the Oakville crowd: “The provincial government decided to embark on an ‘aggressive’ plan to sell assets such as Hydro One, the LCBO, The Beer Store and significant real estate holdings, where possible, in order to ‘mitigate’ increased pressures on power rates as a result of Ontario’s climate change and carbon plans that included eliminating all coal-powered transmission stations, Chiarelli said.” This would suggest Minister Chiarelli was saying the sale proceeds from Hydro One would be dedicated to “mitigate” power rate increases, yetthe report fromearlier in his speech was: “Chiarelli said 100 per cent of the net profits from the sale of Hydro One by legislative law would also be used to improve roads, highways, bridges, transit and other infrastructure.”

It is unclear how using “100 per cent of the net profits from the sale of Hydro One”to build bridges, highways or transit does anything to “mitigate” rate increases in the energy portfolio. Perhaps it’s a reflection of “Chiarelli math”?

Now on the Windsor portion of Chiarelli’s travels and pronouncements the Windsor Star reported:

“While hydro rates will continue to rise, Chiarelli said consumers have seen the last of sharp increases that averaged about six per cent annually over the last eight years. Starting next year, hydro rates for industrial users are expected to rise by 1.7 per cent — about the rate of inflation. Increases in rates for residential users will be ‘slightly higher,’ he added.” “Slightly higher” in Minister Chiarelli’s math means a minimum of 12% as was noted in an earlier article forecasting residential rate growth.

As far as the greenhouse growers are concerned the above noted article had this comment: “Justine Taylor, energy and environment co-ordinator at OGVG (Ontario Greenhouse Vegetable Growers), said hydro expansion is needed to compete with U.S. states, like Ohio, which offer dramatically cheaper electricity rates as well as incentives such as free land and tax holidays.”

It would appear Minister Chiarelli, hearing screams from numerous associations throughout the province, reacts to those who scream the loudest. He offers them concessions by burdening ordinary ratepayers and small commercial enterprises with higher and higher electricity rates to retain the jobs of those who threaten to leave.

It is ironic that U.S. states, like Ohio, NY and Michigan are the beneficiaries of that cheap electricity that Ontario exports hourly at a cost to ratepayers approaching $2 billion annually. This means they in turn can offer “dramatically cheaper electricity rates”.

The foregoing reflects on the results of the Green Energy Act which added a large amount of subsidized wind and solar generation to Ontario’s grid. Due to its intermittent nature they backed it up with expensive gas generation, allowed the spilling of hydro, steaming off of nuclear power, etc. The wasted generation is paid for by residential and small commercial businesses via the Global Adjustment.

The patchwork process the Energy Ministry exudes is the epitome of bad planning.

It is a reflection on the lack of a cost benefit analysis that would have disclosed the burden on Ontario’s economy the GEA created, but the Energy Minister appears willing to continue to dig the hole deeper and deeper.

Comments

As someone who lives in Ohio most of the year, I thank Ontario ratepayers for their largesse. On the other hand, as a part-time resident of Ontario, I hate to see me Hydro rates going up so much. My Ontario rates are now double+ my Ohio rates.

The problem isn’t that Hydro rates are so high in Ontario per se. The problem is that they are UNNECESSARILY so much higher.

There’s only two answers to “why”. One is monumental stupidity, the other is corruption.

The members of the Ontario inner sanctum elite who are making decisions on operations and planning are insane. Meaning a state of mind that prevents normal perception, behavior, or social interaction. Seriously mentally ill
These inmates are crushing Ontario into an economic cesspool

The Ontario power system is in a death spiral. Demand is declining as rates ratchet up. OPG will not be able to recover its costs, let alone contribute to the payback of $26 billion in legacy debt held at OEFC. At some point, the Auditor General will blow the whistle on this fraud. Hopefully, it will be before the $4 billion theft by Premier Wynne of proceeds from the Hydro One sale.

wgluden ” There’s only two answers to “why”. One is monumental stupidity, the other is corruption.-”
A very good summary.
From the results of the ERT’s, and other activities of the IWT companies, another police investigation is in order.
Unfortunately the main media outlets are asleep or bought off.

Just last night I heard that the Trillium funds (generated by Ontario’s government-operated gambling ventures) that used to be available for charitable purposes are no longer there. Did Ontarians suddenly quit gambling? Or did I hear wrong? Or, has the government diverted this money, in the same way they diverted the interest on the stranded debt?

The disgusting Premier Kathleen Wynne and her partner, Jane Rounthwaite seemed to get off on making out as though MPP Monte McNaughton was a bigot for saying that Kathleen Wynne is a poor person to be fooling around with the sex education curriculum. The reason I wouldn’t let Kathleen Wynne be alone in a room with my child, is because she’s IMMORAL; what she’s done to our electricity sector is one example, including the abuse she’s perpetrating on communities across the province with recklessly stupid industrial wind energy projects. The fact Kathleen Wynne identifies as being lesbian may be her only redeeming factor, in that she brings attention to another marginalized group of human beings, proving that things do change, and that those who were once on the bottom can rise to the top. Shame on Premier Kathleen Wynne and Jane Rounthwaite, and Happy Canada Day to all!!